a fiery crash at nascar, daytona today sent really -- cars and debris, well, the debris from the car, hurdling into the stands. the drivers all walked away, they're okay, but some of the folks in the stand, the spectators were injured. they were hurt and taken to the hospital. we're waiting for an update from the head of nascar and also the hospital to learn the extent of the injuries. but look at the crash, one of the cars bursting into flames. and then there is the driver walking away from the crash, again, he is okay. we'll have all of it for you the very latest in one hour, i'm don

lemon, "the situation room" begins with wolf blitzer, i'll see you in an hour. an olympic track star and alleged murderer, free on bail. so what is next for the blade runner, oscar pistorius. allegations that the doctor secretly videotaped patients. and after a brazen heist, can thieves sell $50 million without getting caught? we want to welcome our guests from the united states and around the world. i'm wolf blitzer, you're in "the situation room". there is no deal in sight to keep the federal government from being hammered with $85 billion enforced spending cuts, beginning just days from now, that means pay cuts, layoffs for federal workers including those

on capitol hill. but will the misery be shared by the law enforcements themselves? here is cnn's chief correspondent, dana bash. >> reporter: pain from forced spending cuts is a week away. and lawmakers are preparing their aides for fallout that could hit them like other government workers. >> we re-budgeted with a 10% cut in mind. >> we had to let people go last year, because we anticipated at least a 60% cut. >> reporter: but get this, the very people who voted to put the cuts in place won't see any change to their own $174,000 paychecks. they're exempt, they didn't include their salaries in the spending cuts. so before lawmakers left town with a week-long recess, without doing anything about the cuts, we took an informal survey. do you think you should take a pay cut as well.

>> well, certainly, we're all in it together and are suffering together. >> reporter: most lawmakers from both parties said yes. would you take a pay cut? >> absolutely. >> reporter: but cutting their pay cuts is not so easy, the amendment prohibits them from changing pay until the next election. but they can get creative. ironically, some tea party backers who voted to slash spending are reluctant to cut their own pay. do you think they should cut their pay? >> i don't think so. >> reporter: he was elected to cut the washington spending. >> i don't think it would have an effect. >> reporter: will you, personally, as a member of congress, take a pay cut as well. michele bachmann talked about her staff. >> we would like to keep everybody on the payroll.

but we'll look at reductions on our staff. that is what we need to do. >> reporter: ironically, one of the bigger opponents for congress cutting pay is one of the wealthiest. nancy pelosi says others are not so fortunate. >> most of my colleagues are the bread winners in the family, a pay cut to me doesn't mean as much. >> reporter: dana bash, capitol hill. >> beyond the issue of their own salary, some lawmakers are going out of their way to save money for others. senator rand paul is returning money to the federal treasury. he said he can do that by cutting costs from everything from paper to ink cartridges. thousands are facing furloughs, forced to work four-day weeks and take off a day without pay and that will hurt. our pentagon correspondent has more.

tell us what is going on, barbara. >> reporter: well, you know, wolf, we have been hearing this fancy washington word, sequester for weeks now. but now the reality is hitting hundreds of thousands of defense department workers facing a smaller paycheck. maintaining fighting jets and war ships at the ready. providing care at military hospitals. crucial military functions don't by some 800,000 civilian workers. now, the pentagon has told congress these workers will be forced to stay home one day a week, without pay, if mandatory spending cuts are not averted. >> everybody is waiting to hear. it has definitely become the new, what i call the new "f" word here is furlough. >> reporter: for many, it will be defense cuts, he is already making plans. >> i'll pay the core bills, the mortgage and the utilities and then you live on what is left. >> reporter: the head of the

government worker's union says his people have already suffered. >> already these employees have suffered a 27-month pay freeze. now, a 20% pay cut. >> reporter: the impact of a one day a week furlough for 22 weeks will be widespread. >> on our civilians it will be catastrophic. these critical members of our work force, they work in our p depots, and maintain and repair our tanks, our aircrafts, our ships, they teach our kids. >> reporter: but how much do furloughs really save? of the $46 billion in mandated military cuts the pentagon calculates it will account for 10%. the number 2 official at the defense department is vowing to stand with his workers. >> i can't be furloughed under the law because i'm a presidential appointee, but i'm going to give back a fifth of my salary in the last several months of the year. >> reporter: now workers who are required to maintain safety and

security in the defense department facilities will be exempted. but consider this, 84,000 children who attend dod schools around the world, their teachers will be furloughed one day a would be and those kids will have a very tough time completing the full school year. wolf? >> how much discretion do the pentagon officials have? can they get rid of some very expensive big ticket weaponry jets for example, instead of ordering people not to work? >> reporter: well, not at this time, wolf. because the sequestration as it is called, the mandatory budget cuts are across the board. that is why leon panetta, the defense secretary, has been calling this a meat axe approach, no discretion, almost none. and so it is across the board and everybody has to take an equal hit. >> the military will not furlough foreigners, though, who work on u.s. bases around the world. only american employees, why is that? >> reporter: well, that is right, wolf, places like japan,

where the u.s. military has a significant presence, what they face is in some cases, it is the local government that pays the workers. so the furlough does no good. or they would have to open up the government to government agreement that governs these facilities. and that would take some time. so they just are not going to furlough the u.s. workers overseas. >> barbara star, how will the budget cuts be implemented if no deal is struck to head them off over the week. cnn's tom foreman has more. >> reporter: you know it is puzzling, wolf, because nobody in washington seems to know how it will really work. we're getting an idea, not just because there will be 10% cuts across the agencies that the impact will be felt by people. but more importantly, the way the cuts will probably be

administered, probably, because we don't know how any given department will be able to handle it. let's talk about a department that doesn't exist, the federal bureau of dog grooming and the principle on how it will be done, 10% cuts, let's say 50 billion for salary, ten billion for supplies, 5 billion for administration and another 5 billion for dog rescue. out of this big budget you would think they would say let's cancel the conferences this year, there is the 10%. and nothing really suffers. we can take care of supplies and goods and still take care of the dogs. under the rules of sequestration, they can't do this. everybody we talked to said this would be a line by line cut. each program has to be cut within the department. so what you wind up with is 10% off everything. things that you might be willing to get rid of, you lose 10% of that. things you want to hold onto, you lose 10% of that. if you take this one out you don't get any credit anywhere else. that, wolf, is why some people

say these cuts are draconian, the rules will simply make it be effective. >> to hear president obama tell it the sky will fall when the forced spending cuts kick in. so is the white house hyping the impact or not? we'll talk about that and more when we come back. chances are, you're not made of money, so don't overpay for motorcycle insurance. geico, see how much you could save.

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president obama clearly wants all of us to be very worried about the budget axe that is about to fall. he warns that a lot of people will lose their jobs if forced spending cuts are allowed to take effect days from now. and says that many more americans will suffer at least in some way. listen to a make mash-up of his latest attempt to light a fire under congress. >> meat cleaver approach, at this rate, emergency responders, degraded. border patrol agents, reduced. fbi agents, furloughed. federal prosecutors, let criminals go. airport security, parents, flu vaccines, cancer screens, threat of these cuts not well thought through. not smart, not fair, people will lose their jobs. >> all right, let's bring in gloria borger, and ron

bronstein. should spending cuts be delayed? 50% said yes, 40% said no. is there actual momentum, though, gloria, to delaying it and getting it to stop if it is so horrible? >> no, wolf, everyone i have talked to seems to pretty well say you know what? this is going to happen and that is because politically, everybody thinks it can work for them. that is because the president thinks he has everybody in a corner, politically, don't want to close tax loopholes on the wealthy. and the republicans said we raised taxes on the wealthy six or seven months ago, the public is with us. they want to seriously cut spending. no one wants to do it this way, but both sides think they have an advantage. >> this is across the board, the meat-cleaver cut is very stupid. and the president did call on house speaker john boehner, and

senator mitch mcconnell, do you see any way out of it? >> not probably without it occurring in the first place. the only way out would be a backlash afterwards. >> afterward. >> you know what makes it doubly off target, it is not only the across the board nature, it is across the board aimed at the portion of the budget that nobody considers a real problem. the discretionary spending is shrinking to levels we haven't seen since the '50s. where we've seen investments in research, infrastructure, the exemptions are the entitlements. >> except for the military. >> except for the military, defense and discretionary. but the entitlements are almost completely social security, add social security here in another different category. but that, everybody on both sides agree is the long-term challenge. not only is the board nature of the cuts misguided, but the fact they're focusing on what is not clearly the problem, the

long-term deficit. >> if they were to agree to do something like on the means test, which means that the wealthy would pay a little bit more into medicare, which is something that both democrats and the republicans and the president have spoken about. if they were to agree to do that, they could really make some serious in-roads into future deficit reduction. but right now -- >> right, right. >> that is not on the table. so it is kind of nuts. >> entitlements and revenues are the long-term challenge. or do we have enough revenue to fund the government, in which seniors are going to be doubling in the next 30 years? are we restraining growth where it doesn't simply crowd out spending? that is the real issue, and yet because of a series of political failures over the last two years, here we are with across the board cuts and discretionary spending. >> what they really need is a big deal including entitlement reform, including social security, medicare-medicaid,

coupled with tax reform at the same time. everybody says there should be tax reform, but the republicans don't want to do it unless it is cupped with entitlement reform. it is a huge problem. >> they're talking past each other at this point. and the public knows it. which is why a third of the public if you look at the polls is not paying attention. and by the way, independent voters, very important are split on whether we just ought to let it occur, or not. >> it is a political problem, not a policy problem. every commissioner that has looked it at it, basically comes up with the same reform. but when president obama says it would lead to a fever, where the two sides say look we're going to be here for a while -- >> and david brooks, our friend, are the columnist with "the new york times," said it may have seemed insane. but both parties are secretly discovering they love sequestration now. >> because each part believes there is a political advantage in this.

and so what was unthinkable when they came up with this idea, by the way, which everybody thought was crazy and would never occur -- >> and it was designed not to occur. >> it was designed not to occur in the summer of 2011, now, now they look at it and go wait a minute. maybe it is not such a bad idea. because in a way they don't have to do the work. >> it forces them to make some cuts. >> this just puts off the real issue. we have a republican house. we have a democratic president. we have a legitimate long-term deficit challenge. both in terms of the entitlements and whether we have enough revenue to fund what is going to be required as our society ages. sooner or later we have to address the problem, it doesn't address the problem. >> gloria, what makes people crazy out there, we seem to be going from one crisis to another, to another financial crisis to another one. everybody seems to inept.

>> that is because they are, and they continued to kick the can down the road. i have a list here, go back the 2010, summer 2011, january 1, you just had the fiscal cliff. now we have the march 1st deadline, and then by the way, march 27th, we have another deadline about shutting the government down. so can you blame the public for sort of tuning it out and just giving congress what is it? a 15% approval rating? and by the way, the president's approval rating will, i bet, go down, as well. >> all of these financial crises are really a manifestation of the same political crisis. we have the same two mirror coalition, the democratic coalition, the republican coalition, the democrats, won five out of six popular votes, the republican, the structure of the house. neither of these are going away. the core issue is are they willing to find a bridge between their views and reach a reasonable approach to going forward? because without it, we just keep

banging into the same wall and the same idealogical dispute. >> and they will only do it if it is in their best interest for example, they will do something, i believe on immigration because it is in their best interests for the republicans and democrats to do it. when they finally decide it is in their best interest because of the economy, maybe they will get something done. >> the idea of forced sequestration came out of the white house, almost all the republicans joined the democrats in voting for it. so there is a lot of blame to go around. coming up, a shocking information about the fbi, bugging the boss's office. doris taerbaum finished her first marathon at 50. not everyone peaks in their twenties. throughout their lives. passion keeps them realizing possibilities. an ally for real possibilities.

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it is a laundry list of bad behavior, some of it criminal, including mistresses, nude photographs, check fraud and special favors. cnn has learned all of this obtained in confidential fbi internal reports, regarding misbehavior of fbi employees. more on the exclusive report. >> reporter: the fbi's motto is bravery, integrity, fidelity, agents take down bank robbers and the mob. the fbi's polished image kept in the spotlight by countless tv shows and movies. >> i'm with the fbi. >> reporter: but there is another side to the fbi, contained in these confidential internal records obtained by cnn that show serious misconduct by employees, and even supervisors.

assistant fbi director candace will oversees the office of special responsibility. she sends out the reports three times a year to all 6,000 employees. >> we do our very best, we don't obviously, if you know anything about our quarterlies and they're not a public document but we know that doesn't mean that cnn doesn't have a copy. there are no names or locations or job titles, we do our very best to sanitize the quarterlies so that the employee's identity is protected while imparting the knowledge as best we can, so that the employees can learn something from it. >> reporter: cnn obtained these documents about an employee who hid a recording device in a supervisor's office, and did an unauthorized search of the office. another involved in a domestic dispute at a mistress's apartment, in which the police were called. another hid electronic evidence, and another employee repeatedly

committed check fraud. and then there is the employee who married a drug user dealer and lied about it. all of them were fired. kn knowing what this agency does and what this agency is about, how can anybody be so stupid? >> well, you know it is funny we say that. because we do. we look at our cases. and we are struck sometimes. i've been doing this a really long time, nine years at the fbi. and as long as i have been doing it, i think okay, i've seen it all. i still get files and think wow, i never would have thought of that. >> reporter: i have to tell you, i don't think i would have ever bugged my boss's office, especially if they were an fbi agent. >> oh, i know, it is extraordinary, and that is one where planting a device and lying about it. that is why that is a former employee. >> reporter: the internal reports show a 14-day suspension for the employee who paid for a sexual favor at a massage pa

parlor. using a personal cell phone to send nude photos to another employee got a ten-day suspension. but there was only a five-day suspension for an employee who repeatedly used a government blackberry to send sexually explicit messages to another employee. this included action we uncovered years ago, regarding information on bureau computers. is that enough punishment for the employee? >> keep in mind if you lose a week's pay, or two weeks's pay for some employees, that hurts, and we've seen a rash of texting cases, people using the blackberries for these reasons, and we hope getting the messages out in the quartlies will teach people you can't do this stuff. you know, when you're given an fbi blackberry, it is for an

official use. not to text the woman in another office, or to send a picture of yourself in a state of undress. >> reporter: in the past months, the fbi disciplined 180 employees. 85 were fired. and will says that the information sent out by her office do deter bad behavior, drew griffin. as for what fbi employees are saying, we reached out to the president of the fbi association who told us as bad as it looks "quoting in mind, keeping the number of ratio with the fbi employees is among the lowest of the federal government and private sector." we'll really talking about a small fraction of people doing very stupid things. it is the case being watched around the world. the famed olympian, oscar pistorius charged with murdering his girlfriend. a south african judge has made a decision on his bail hearing. we'll tell you all the things

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decolletage, decollet he was one of the biggest starts to emerge from last summer's olympic games, now, oscar pistorius, also known as "the blade runner" is charged with murdering his girlfriend. his bail hearing was full of drama, from pistorius breaking down emotionally to a detective getting pulled from the case after his own unrelated murder charges came to light. and it all culminated with the judge's ruling. >> the affidavit, and the way that he did, placing it before the court, together with the fact that none of the factors that need to be established have been established, i come to the conclusion that the accused has

made a case to be released on bail. >> now, from johannanesburg, where do you think we go from here? how long before the actual trial, for example, begins? >> reporter: okay, well, i've been speaking to legal experts, and they believe that even if this is pushed through quickly, which is probably likely to be done because it is such a high profile case, you are only looking at a trial date set for the latter part of the year or early next year. and again, because it is so high profile and because there is so much conflicting information on what happened that night, it is believed that the trial could take a year. so we're looking at two years before there is a final verdict. >> so he is out on bail. his coach says he will start to train again as early as monday. listen to this, listen to this. >> i think just to get his mind

sort of cleared, the sooner he can start with a bit of work, the better. >> i'm ready, we can start training monday if he is out on bail. >> so what kind of restrictions will he be under? will he be able to go about training, travel, if you will, domestically, obviously, within south africa? what sort of restrictions will he have. >> reporter: well, there are quite interesting restrictions coming out of the bail conditions. first of all he has to report to a police station on a monday and friday. and also interestingly, they say he can't go anywhere near an airport. and of course, he can't go to his home where the crime took place. and also, significantly, although i'm not sure why it is significant, he is apparently not allowed to drink alcohol. and that is one of his bail conditions. but in terms of him training, his family lives here in pretoria. we're not sure where he will be living. and his training facilities are

literally a few blocks away from here at the local university. you know, i filmed him there a number of times going around that track. so -- and his coach is based here. so i assume he will be based still in pretoria. in terms of whether he is physically and mentally strong enough to start to train. wolf, i tell you, he really looks like a broken man. a number of us have been saying just in the past weeks since that tragedy, oscar pistorius looks like he has aged ten years. lo looks like he is going gray, obviously lost a lot of weight. this is a man who has fundamentally realized the implications of the awful deed that he admitted to doing on valentine's day. and i think he is very much a broken man, clearly looks in shock. and i think his family, and i understand from his family that they are going to keep a very close eye on him, whether it is in any state to actually go training or running, i don't know actually. >> well, we'll soon find out.

robin, thank you very much, from south africa. other news, you may have heard about the massive hacking operation, targeting companies like coca-cola, security companies like rsa and even oil companies and power grids. the hack was traced back to a military complex in china. we sent cnn's david mckenzie to shanghai. and he was chased, watch this. >> reporter: driving in the morning part of shanghai, this is the hub of the low-tech industry. but also allegedly a hub of high-tech corporate and government spying. the allegations come from a group from the u.s., saying there are tens if not hundreds of thousands of chinese hackers working together with the chinese government to hack into mostly u.s. companies and steal data and corporate secrets.

m mandian said that after years of hacking, they said the hacker would go into an institution through back door means and spend potentially years there stealing secrets. some of these industries were national security industries such as i.t. and high tech industries. it is clear they were closely watched by the liberation army, and as we got closer to look, we got in trouble. keep driving, drive away, drive away. drive away. we have had to move out of sight of that facility. now, the question is, was that response because it is a military installation, or is there something more here? is this a secret center of chinese bloggers working for the chinese government. and attacking u.s. institutions? that is certainly what mandiant

is saying, but the chinese government says this is not the case. they say it is a baseless accusation and "irresponsible." chinese government says that 14 million are hacked here in china every year. and they blame the u.s. the question is, is this just the next salvo in a cyber war? shanghai. and let's get more on the company that uncovered all of this, kevin mandiant is the ceo of mandiant, thank you for joining us. >> thank you. >> you discovered this building in shanghai, you put it in your report. are you surprised what we just saw from david mckenzie? >> i got to admit, i am surprised they almost caught the car. yes, i think it bolsters and confirms the report. you know, we spent several years investigating this group. two things led us to this confirmation. all the geeky evidence led us to

shanghai, and all the open information on the buildings that are used led us to the exact same location. so there is pretty much no doubt in our minds this is a government-run facility for hacking. >> now, they're clearly upset by your report. they don't like the fact that that building has been pinpointed. as soon as i heard the report, i said these guys are pretty sophisticated. how worried are you they're going to try to hack your company, mandiant, and hack into your computers? >> well, i know that is almost inevitable. before they tried to break into mandiant. the report is 60 pages long, there is an example they impersonated my address, and my employees, and i am very convinced there will be repercussions in cyber space for mandiant. >> what do you do? >> we have as many precautions as we can have. i think they exploit human vulnerability and weakness, and we have over 300 employees. it only takes one of them to be

fooled into doing something, and we can have consequences. >> just today, the obama administration rolled out their trade secret theft strategy. that is what they called it. the priorities are, they want to convey concerns to countries with high levels of incidents. i mean, this is really relating to exactly what you have uncovered. they also say press governments give private sector warnings, increased public awareness of threats and risks. this comes just a day after your report is put out. i mean, seven years after all the work you have done. what you see here from the obama administration, is that good news? does that change anything, in your view? >> well, there are a couple of things that came out of this, when you respond to the incidents we have witnessed, you realize there are technical positions we have to pursue. but there is never going to be to holy grail where we have the whole field covered.

so you need diplomatic things, as well. the tolerance in the private sector is shrinking, people are sick and frustrated with how much ip we've lost with the chinese hackers. so we thought with the timing, let's get the report out, up the ante, and a diplomacy on the side of things. one thing they said, we would increase the diplomatic engagement, that is ultimately good. without diplomacy, technology wouldn't solve this problem. >> and you heard from the administration. >> certainly good news. >> good luck, not getting hacked. >> thank you. >> not getting hacked. that is true. and just ahead, a special report. i'm brian todd in baltimore, there are shocking new allegations against an obgyn doctor who worked at this hospital in. did he record his patients without their knowledge?

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johanbu johanbu . truly shocking allegations that a doctor may have secretly videotaped his patients, brian todd has more. >> police say one of those cameras was hid inside a pen. baltimore police say hundreds of dr. nikita levy's patients have contacted them to give information on the case, and they say they're combing through an enormous amount of evidence. for about 20 years he worked at this medical center, affiliated with the john hopkins center in baltimore. now, authorities say that dr.

nikita levy photographed his patients without their knowledge, and possibly others. >> one of the cameras we can confirm is a pen camera. there are other types we don't want to get into, again, given the sensitivity of the investigation. >> how many cameras? >> multiple. >> i really can't get into the number. >> nor can police say what the cameras were hidden in. they say they're examining a mountain of evidence, still in video cameras, multiple servers and hard drives. they are investigating if he had an accomplice. >> what did he do with the information? did he sell it? was it put on the internet? >> some of the patients spoke to a cnn affiliate. >> dr. levy is the sweetest person, this is all just -- this is just shocking. >> that is a violation. you understand what i'm saying. that you got somebody that you're supposed to trust with your body, your information which is supposed to be confidential. >> and now, dr. nikita levy can't answer the allegations.

after learning about the allegations, john hopkins says they suspended him the next day. they say they terminated him on february 8th and offered him counseling. ten days later, just this past monday, police responded to a call here at dr. levy's home. they say he was dead when they arrived. they're investigating it as a suicide. john hopkins said they reported the alleged activity to the police immediately. in part, the statement says an invasion of privacy is intoller rabl, they say it conducts the privacy rules. one attorney has been contacted by at least 70 patients of dr. levy's. i asked him how the alleged behavior was discovered. >> the story is that a john hopkins employee noticed something unusual about dr. levy's examinations on february 4th. and alerted a supervisor. >> do you know what that was?

>> no, we don't. nobody knows, other than john hopkins, and they're doing their own investigation. >> we couldn't reach dr. levy's attorney for comment. i went to his home and knocked on the door to see if anyone would speak on his behalf. a gentleman that answered the door refused to do so and said it is all news to us. >> patients are upset about the way they found out about it. >> that is right, a lot of patients said they found out about it from the news media and are upset that john hopkins didn't contact them. now, john hopkins says they're communicating with patients as fast as they can, based on what police say they are allowed to say. they're saying hey, we're doing the best that we can, to contact the patients, how many are affected? we don't know. and coming up, 15 million worth of diamonds stolen in a brazen heist, could they be headed to a jewelry store near you. ♪

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$50 million worth of diamonds stolen in a brazen heist at the brussels airport, what are the chances they end up in a necklace like these? we go to the diamond district for answers. >> sfrtraight from a hollywood movie. but in this real life plot, things go as planned. the thieves have managed to steal the diamonds thousand they just have to sell them. >> you do not get $50 million or more and say, how do we get rid of it. you have arranged before hand to do that. >> reporter: usually with the

help of fences. illegal wholesalers willing to sell them at a profit. >> whoever thinks they are buying bargain basement diamonds, be careful because we will find them sooner or later. >>. >> reporter: the diamonds could be sold for $.30 on a dollar. possibly ending up in a foreign country where controls are not as strict. >> countries that have large diamond facilities. >> reporter: the diamonds have to be kept from being traced. >> they may not want to get rid of them all at once. it could be too difficult. there are not a whole lot of people that have the means to come up with payment that quickly. >> they will be up state of the art technology, some polished diamonds with a unique fingerprint allowing them to be matched to stolen diamonds in an international database. >> it's simple, we place the

diamond, table down on the optical glass. we center it. we close the door. and we run it. >> reporter: retailers are strict about the diamonds they buy, demanding a gia grading report that lists each stone's characteristics helping to identify stolen 1s. >> you will not accept any diamond from anybody that comes to sell you, without this report? >> that's correct. it has to have a report showing that it went through the right institution. >> reporter: but retailers admit that even stolen diamonds can have certificates and thieves will have diamonds recut to make them harder to trace. >> the people that they will sell them too will be corrupt people. they are not going to be selling it in the open market to the normal buyer in due course. >> reporter: and it's in every jeweller and diamond cutter's best interest that the stolen diamonds are recovered t price of diamonds could call and that impacts the industry as a whole. cnn new york.

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